meljun cortes materials management transactions

Unit 12

Materials Management (MM)

- Transactions -

January 2008© SAP AG - University Alliances and The

Business Process Integration

Transaction Data

• Includes internal and external exchanges that describe business activities

• Unlike master data, aggregate transactional data is dynamic – each transaction is unique

FIFinancialAccounting

COControlling

PSProjectSystemWF

WorkflowISIndustrySolutions

MMMaterials Mgmt.

HRHumanResources

SDSales and Distribution

PPProductionPlanning

QMQualityMgmt.PM

Plant Maintenance

SMServiceMgmt.

Client / ServerIntegrated BusinessSolution

ECEnterpriseControlling

AMFixed AssetsMgmt.

Materials Management (MM)

Procurement Process (Procure-to-Pay)

Purchase Requisition

Paymentto Vendor

Notify Vendor

VendorShipment

InvoiceReceipt Goods

Receipt

Purchase Order

3-WayMatch

Basic Procurement Process

• Requirements Determination - Purchase Requisition

• Vendor Selection• Order Processing - Purchase Order • Order Tracking • Goods Receipt and Inventory Management• Invoice Verification• Payment

Purchase Requisitions

• Internal document• Requesting a certain quantity of material or

service on a certain date• Can be created: – Manually– Automatically (Materials Requirements Planning

(MRP), sales orders, etc.)• Release approval procedures are optional

Purchase Requisitions Sources

• Manually created by user department– Office supplies– Projects– Prototype materials

• Automatically created by– Planning (Material Requirements Planning (MRP),

Master Production Schedule (MPS))– Plant Maintenance– Production Orders– Sales Orders

Purchase Requisitions Processing

• Create purchase requisition (manually or automatically)

• Determine source of supply• Release procedure (optional)• Assign vendor and process

Purchase Requisitions Creating

• Default data for line items– Delivery dates, plants, purchasing groups, etc.

• Maintain line item data– Materials, quantities, delivery dates, etc.

• Maintain account assignment (if required)– Cost center, General Ledger accounts, project

number, etc.• Check data• Save

Purchase Orders

• Purchase Orders are:– A formal request to a vendor to provide materials

or services– An internal planning and tracking tool

• Purchase Orders identify:– Vendor– Material and/or service– Quantity and price– Delivery dates– Terms of payment

Purchase Order StructureHeader

• Header - information specific to the entire purchase order– Vendor– Currency– Payment terms

Purchase Order StructureLine Items

• Line item details– Account assignment– Delivery schedule– Materials or services quantity– Price – Description– Item category

Purchase Order

• Request for Quotations• Purchase Order• Order Acknowledgment

Purchase Order – Output Format

• Printed and mailed• E-mail• Electronic Data Interchange (EDI)• Faxed (hardcopy or electronic)• eXtensible Markup Language (XML)

Goods Receipt

• Goods receipt with reference to a purchase order– Copy data from purchase order– Delivery notification– Invoice verification– Updates purchase order history– Inventory update– Automatic update of General Ledger (G/L)

accounts

Goods Receipt (continued)

• You can search for the purchase order number with– Material number, vendor number, etc.

Goods Receipt – Destinations

• Stock - given a storage location, can be posted to three different stock statuses– Unrestricted-use– Quality inspection– Blocked stock (valuated)

• Consumption - can be assigned a recipient or unloading point

• Goods receipt for blocked stock - updates inventory, but material is not valuated (conditional acceptance)

Goods Receipt – Movement Types

• Movement types - stock transactions– Goods receipt– Goods issue– Stock transfer

• Movement type determines which– Quantity fields are updated– Stock types are updated– General Ledger (G/L) stock or consumption

accounts are updated– Fields are displayed during document entry

Goods Receipt – Movement Types (continued)

• 101 - goods receipt for purchase order into warehouse/stores

• 102 - reversal of goods receipt for purchase order into warehouse/stores

• 122 - return delivery to vendor • 501 - receipt w/o purchase order into

unrestricted-use stock

Goods Receipt – Account Postings

• Inventory account is debited at standard price• Goods Receipt/Inventory Receipt (GR/IR)

clearing account is credited at purchase order price

• Price difference account is debited (credited) with difference between standard price and purchase order price

Goods Receipt – Effects

• Purchase Order (PO) history and Purchase Order (PO) updated

• Material Master - stock and value updated• Notification of goods receipt issued (optional)• Transfer request to Warehouse Management

system (if active)

Goods Receipt – Effects (continued)

• Material and financial documents created and/or updated

• Stock and consumption accounts updated• Inspection notification in Quality Management

(QM) - if active

Invoice Verification

• Matches the vendor’s invoice to the purchase order and the goods receipt (3rd part of 3-way match)

• Matches price and quantity• Updates the purchase order and its history• Updates accounting information

Invoice Payment

• Selects invoices for payment based on the payment terms in the vendor master or purchase order

• Generates payment for released invoices• Updates accounting information

3-Way Match for Payment

PurchaseOrder

GoodsReceipt

InvoiceReceipt

Debit Credit

PaymentProgram

Verification

Accounts Payable Settlement Process

• Determines:– Open items to be paid– When they will be paid– Bank from which payment will be made– Payment medium– Who will get paid

• Payment process creates a financial accounting document to record the transaction

Goods Receipt / Invoice ReceiptReconciliation Account

Purchase requisition

Purchase orderMaterials Management (MM) and Financial Accounting (FI)via automatic account assignment

Goods receipt

No impact onFinancial Accounting (FI)

Inventory

GR / IR

Goods Receipt / Invoice ReceiptReconciliation Account

Amount owed isassigned and transferred tovendor account payable

Invoice receipt

Vendor A/P

GR / IR

Vendor Payment

Amount owed is paid tovendor and account payable is reduced

Vendor A/P

(FI – MM) Integration Points

Invoice Receipt

Payment Program

Goods Receipt

AP (Vendor)

GR / IR

BankDr Cr

Inventory

$100 $100 $100 Dr CrDr Cr

$100 $100

Automatic Account Assignment

• Debit posting $100• BSX - inventory

posting to trading goods inventory account 201XXX

• Credit posting $100• WRX goods receipt

posting to GR/IR account 310XXX

Unit 12 – Exercises

100. Create Purchase Order for Slick Pens101. Create Purchase Order for Premier Pens102. Create Purchase Order for Promotions, Ltd.103. Create Goods Receipts for Purchase Orders104. Create Invoice Receipts from Vendors105. Post Payment to Vendors106. Display Vendor Line Items

meljun cortes materials management transactions

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